Trump’s 'no tax on tips' law gives boost to content creators and podcasters

President Donald Trump’s recent “no tax on tips” law is giving an unexpected windfall to digital content creators. 

Part of the broader “Big Beautiful Bill” passed in July, the provisions allows qualifying workers to deduct up to $25,000 in tip income from their federal taxes through 2028.  While pitched primarily at restaurant servers and hospitality workers, the measure apparently gives a boost to online personalities who rely on direct contributions from their audiences.

The move recognizes how modern content creators rely on direct audience tipping, just like a waiter getting a cash tip. The Treasury Department's list of qualifying occupations includes podcasters, social media influencers, streamers, and other digital content creators. These roles fall under categories like “Entertainment & Events,” stretching beyond traditional occupations.

A 2024 study by the Creative Class Group found that more than a quarter of large U.S.-based influencers — those with 100,000 followers or more — reported receiving tips. “This could change the compensation structure of the industry in ways that make gratuities even more central,” the report noted.

The provision targets individuals earning below income thresholds — single filers up to roughly $150,000–$160,000, and married filers up to $300,000 — after which the benefit phases out. Proponents of the change say it could be transformative for creators who are still building an audience. 

“It will have a very strong economic impact, particularly for those early in their careers,” Daniel Abas, president of the nonprofit Creators Guild of America, told Bloomberg. Most creators earn below threshold, she adds. Some higher earners — up to about $400,000 annually — can also claim a partial deduction.

Adult entertainment creators may see the largest boost, with those on platforms such as OnlyFans depending heavily on tipping. Katherine Studley, a tax preparer who represents adult performers, told Bloomberg that the exemption “a huge win” for her clients. The move was unexpected move from a Republican administration, said Studley, as it typically embraces social conservatism. What’s more, it isn’t cheap. The nonpartisan Congressional Budget Office (CBO) projects the provision would increase the deficit by $40 billion through 2028, while the Joint Committee on Taxation, also nonpartisan, estimates that the deduction will cost $32 billion over the next decade.

'New media voices'

Yet, the decision to cover digital creators reflects the growing political currency of the influencer class. Both Trump and Democratic challenger Kamala Harris courted online personalities during the 2024 election, speaking on mainstream podcasts and making TikTok content.

When Trump took office in January, the White House announced it would open press briefings to “new media voices” content creators and podcasters. Within just 24 hours, more than 7,400 influencers applied for press credentials, Bloomberg reported.  

However, creators may bundle special content or perks with fan payments, blurring whether those transactions qualify. That means defining a “tip” in the digital world can be a "thorny issue,” Alex Muresianu of the Tax Foundation, said to Bloomberg.

On YouTube, tips are known as "Super Chats”, features that allow viewers to “purchase live chat messages that stand out and sometimes pin them to the top of a live chat feed,” according to parent company Google. Twitch streamers receive a virtual currency called "bits” that viewers purchase to “cheer” on streamers, which creates an animated emote in chat, showing support and celebrating moments. On TikTok, users buy “Gifts” using TikTok Coins during live streams or on video posts. These virtual items appear on screen as animated emojis. All of these features qualify as tips under the law, according to Business Insider. 

However, other cases are less clear. On OnlyFans for example, creators offer customized content and one-to-one chatting via so-called “tip menus.” For podcasters, tips may come in the form of direct donations, but most often they post bonus content on crowdfunding platforms like Patreon.

Creators might restructure pay models accordingly, added Muresianu. Accountant Studley said some of the adult creators she works with have already consulted with her about how to navigate the law.